Full detail of the deal: Chinese company awarded 99-year lease on Darwin Port for $506 million

READ THE FULL DETAIL OF THE DEAL: A Chinese-owned company has been awarded a 99-year lease on the Darwin Port for $506 million

East Arm Wharf

A CHINESE-owned company has been awarded a 99-year lease on the Darwin Port for $506 million in a deal Chief Minister Adam Giles has called the next step in fulfilling the northern development “dream”.

The half a billion dollars in upfront cash will be used in part to pay down debt, with the rest committed to future infrastructure projects, Mr Giles said.

But he reiterated yesterday the biggest advantage was the private investment in the Port that would grow the NT’s economy and open up better trade links with Asia for the future.

“This is one of the most strategic advances the Northern Territory could take. This is the investment that will connect the Northern Territory to Asia economically,” he said.

“What we want to make sure is that it’s about long-term jobs and investment in the Northern Territory.”

Landbridge has pledged to spend $35 million in the first five years to expand the Port and $200 million over a 25-year period.

The company’s Australian infrastructure director Mike Hughes said the group had the connections in China to increase trade, expand the Port and get shipping prices down through economies of scale.

“We believe we’ll put Darwin on the map in China for Chinese businesses. We are the right partner for the Northern Territory,” he said.

“In the medium to long term, prices are going to come down because the Port is going to grow. We have a long-term prospectus so we’re not driven by next week’s earnings or next year’s earnings. That means we’re going to be prepared to invest to build capacity.”

Conditions in the contract will also tie rent increases to no greater than the CPI, Mr Giles said, to avoid skyrocketing rents seen in Melbourne when that port was privatised.

Another term of the agreement will see the NT Government take in 15 per cent of any so-called “super profits” – revenue earned over annual projections. The Government also sought to keep 20 per cent of the Port in Australian hands, for now with the NT Government. But Landbridge must find an Australian company to take the 20 per cent share within five years.

Mr Giles said the process to find the proper bidder for the Port was handled differently than the outright sale of TIO, which sold for $424 million last year and caused protests in the streets.

This time, he “brought people along for the journey”, he said, “in an open and transparent process” that saw a parliamentary select committee struck to examine port sales in other cities.

But the Maritime Union of Australia says Port workers were not consulted about the sale and have called on the Giles Government to ensure that current working conditions for public employees is enshrined in legislation for the term of the lease, not just until 2018. “It’s a commitment like the one that was made to TIO and Bus Link workers who were pretty much thrown out the door as soon as the ink was dry on the paper,” said MUA spokesman Thomas Mayor.

He added last week’s protest at Port offices could be the first of more if workers were not protected.

“Today, there are a lot of pissed off port workers and that’s what Giles risks if he doesn’t deliver on these commitments,” he said. “Talk is cheap.”

Labor leader Michael Gunner called the lease a shortsighted “cash grab” that failed to seek private investment while maintaining control of the Port.

“The CLP has no mandate to sell or lease the Port,” he said. “A decision of this magnitude should always be determined by the people. With an election now just 10 months away, there was time to take this route.” Landbridge Group will assume the lease of the Port, the Darwin Marine Supply Base at East Arm and Fort Hill Wharf.

The NT Government will retain Stokes Hill Wharf, Fisherman’s and Hornibrook’s Wharves and Frances Bay facilities.